Rent rates have held steady in Knoxville, TN, so far in 2017, with Trulia pegging the median rent per month as of June 2017 at $1,200. This seems to suggest that if you own property that you aren’t using currently, putting it up for rent could be a good idea at present. However, being a landlord is more than collecting those monthly checks. After all, you want your property to remain in almost pristine condition despite tenancy. For this, not only do you need to screen prospective tenants well, you also need a rent agreement that will stand you in good stead.
Reasons Why You Should Have a Written Rent/Lease Agreement
The first thing any property manager or agent worth their salt will tell you is that you should enter into a written agreement with anyone wanting to rent your property. This is true even if the prospective tenant is someone whom you know and trust. There are both legal and financial implications that can only be covered by something you put down in writing.
The first thing that a clearly worded and comprehensive agreement does is that it prevent uncertainty and therefore disputes. So, there is no question about who takes care of repairs or the procedure to be followed if the rent check is delayed, and so on. What if the tenant decides to bring in a dog after a few months? Are you comfortable with pets on your property? What will you do if you aren’t?
Having a written agreement also ensures that the most important issues are not only identified but solutions to them are also listed. This will also give the tenant peace of mind, knowing that the landlord feels responsible to deal with issues related to the property.
So, now that you know you need the agreement drawn up, you should also know some key issues that it should address.
Important Things Your Rent/Lease Agreement Should Include
Regardless of whether you prefer a rent agreement or a lease, there are some key aspects that they should address very clearly, not the least of which is the amount of rent you expect and its due date.
- Names of Tenants: Even if only one spouse signs the lease for the family to live on your property, it is important that the agreement spells out the names of all adults who will be living there. This gives you, the landlord, greater security, given that if one person defaults on the rent, you have the freedom to seek the amount from the others named on the rent document. Make sure you also add something about the limits on occupancy, so that other people don’t suddenly move in with your tenants on your property.
- Rent Term: This is very important. Most experts suggest that you have a specific, fixed term for the lease. On the completion of the term, a new agreement should be drawn up, taking into account your experiences with the current tenants. This gives you leeway to make changes and additions to the agreement. A large percentage of leases are made for one year, although whether you want a six-month one or a month-to-month system, is completely up to you.
- Maintenance & Repair: The way to ease your role as a landlord is to specify who is responsible for maintenance and repairs. You can also demarcate maintenance and repairs that the tenant should take care of and those that you will be looking after. This will put part of the responsibility for ensuring that your property is not unduly damaged on the tenant. You can also specify the process to be followed when repairs are needed. How should the tenant inform you if there is a defect/damage/hazardous situation? Can the tenant paint the walls any color they want to or do they first seek your permission?
- Rent, Deposit & Fees: Not only should the agreement specify the exact rent due, it should also mention the mode of payment acceptable, due date, whether you will charge a late fee if the tenant fails to pay the rent by that date, grace period for rent payment, etc. Another aspect that many landlords have difficulty with is the security deposit. This is why it is recommended that you not only specify the exact security deposit amount, but also how it might be used, how and when it will be returned and what deductions are likely to be made.
There are many more aspects to consider while drawing up an agreement, such as federal, state and regional laws and regulations. Therefore, the easiest course of action is to hire a professional to do all this for you. Not only can they help you with listing and advertising your property, they will also help with screening tenants, ensuring that the property and the agreement meet the codes and regulations, etc. In fact, getting someone else to do all the dirty work for you is the best way to enjoy the landlord life!